Insurance executives have expressed doubt over the realisation of the federal government's aim for the insurance sector to achieve NGN1tn ($2.6bn) in premium income in the current financial year.
This springs from challenges facing the economy, especially the insurance industry. With compulsory insurances virtually non-existent, operators feel that the likelihood of meeting the target is remote, reported The Guardian.
At the Nigeria Insurance Summit in December 2014, the government said it planned to grow the sector’s premiums to NGN1tn in 2017, and NGN5tn in 10 years. At the time of the summit, the industry reported annual premiums of NGN300bn.
The target appears ambitious because the Nigerian Insurers Association (NIA), revealed the volume of business written by the industry rose to only NGN490bn in 2019, a 15.55% increase over NGN413.8bn in 2018.
Stakeholders say that low penetration and racketeering activities remain major hindrances to the realisation of the NGN1tn target.
Nonetheless, they say that business could increase if the government enforced compulsory insurance policies and increased awareness of insurance among the public.
Mayowa Adeduro, managing director of Law Union & Rock Insurance, says that the plan cannot be achieved because it remains a plan without the necessary structural, legal and regulatory alignment needed. “Nothing has changed outside the paper; the industry structure remains the same; the Insurance Act and NAICOM Act remains the same and no executive order was pronounced to give teeth to the vision. Seven years after, we have barely added NGN150bn to the figure then.”